Advisers to Bank of Ireland’s corporate overhaul – a largely technical move – stand to make close to €10.5m in fees.
The figure was disclosed in a prospectus, filed yesterday, detailing a reorganisation of the lender that will result in a drastic reduction in the number of shares on issue and create a new holding company.
The plans, unveiled last week, reflect the tightening regulatory regime in Europe and are aimed at minimising taxpayers’ exposure to another banking crisis.
Davy and UBS were drafted in as joint corporate brokers to the deal, with the Dublin-based broker acting as the Irish and UK sponsor, while the Swiss lender acted as UK sponsor.
Accountancy firm PriceWaterhouseCooper is also in line for a cut of the fees.
Bank of Ireland sought legal approval for the scheme in the Commercial Court yesterday. Shareholders must also greenlight the move with an extraordinary general meeting scheduled for April 28, the same day as the bank’s annual general meeting.
The overhaul means investors will receive one new share in the freshly formed holding company – Bank of Ireland Group PLC – in exchange for every 30 shares held in the existing listed entity, adjusting the stock’s price to around €7. Bank of Ireland’s shares closed yesterday at 23c.
The share consolidation will shrink the volume of shares on issue by close to 97 per cent.
It also clears up a legacy issue with the high volume of shares created by successive capital injections in the wake of the nation’s financial crisis.
The Government still holds the largest stake in the lender at 14pc, closely followed by two US-based institutions – Capital Group Companies and Blackrock.
According to the prospectus, the consolidation of the share capital could have a minor impact on the group’s reported capital, lowering it from “18.2pc to 16.4pc on a transitional basis”.
Bank of Ireland earlier signalled the overhaul could hit its capital ratio.
But the prospectus makes clear the effect will “depend on the timing of the holding company establishment, absolute capital levels and capital structure at the time of establishment and any mitigating actions the Group may take”.
The scale of this reduction would also “be eliminated as and when the relevant subordinated debt is redeemed”.
Earlier this month, Bank of Ireland announced its long-serving CEO, Richie Boucher, will retire later this year.
The prospectus stated that while the date of Mr Boucher’s departure “is not yet known”, a “selection process” is underway for his replacement.
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